Pound Repeatedly Tests 1.5700, Faces Strong Rejection

The British Pound’s advance last week has been limited, compared with other high yielders, with the GBP/USD pair unable to advance beyond the 1.5700 level.

The pair however, closed the week at its highest in 7-weeks, also supported by dollar’s sell-off. During the upcoming days, the UK will release the second estimate of the Q2 GDP, with the consensus pointing for a 0.7% advance, in the quarter, and up 2.6% yearly basis, matching the first estimate.

Should the figures result up beating, the Pound may finally find the strength to rally. In the meantime, the pair maintains a neutral-to-bullish stance, as the daily chart shows that the technical indicators lack directional strength above their mid-lines, whilst the 20 SMA remains horizontal around 1.5600.

In the 4 hours chart, the price stands above its 20 SMA and a daily ascendant trend line coming from 1.5423, August low, around 1.5640/60 for this Monday.

In the same chart, the Momentum indicator presents a bullish slope above 100, whilst the RSI indicator remains flat around 56, limiting chances of a strong upward rally.

Meanwhile the GBP/CAD advanced up to a fresh multi-year high of 2.0694, as oil prices sunk, with West Texas Intermediate crude oil futures briefly dipping below $ 40.00 a barrel on Friday, following a report released by the oil-field-services company Baker Hughes Inc. reporting that the number of rigs drilling for oil in the U.S. rose for the fifth straight week, up to 674 against 672 in the preceding week.

The GBP/CAD daily chart shows that the price held near its high by the close, and that the 20 SMA is slowly gaining upward strength below the current level, whilst the Momentum indicator bounces from 100, and the RSI indicator accelerates north around 64, all of which maintains the risk towards the upside.

In the 4 hours chart, the price is also well above a bullish 20 SMA, but the technical indicators have turned lower near overbought readings, suggesting the cross may correct lower, particularly on a break below 2.0614, former high and the immediate support for this Monday.

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